What's going on?

Stocks around the world had a great month � in fact, it was the best month in 4 years. Both American and European stocks were up more than 8%!

What does this mean?

The summer was tumultuous and the third quarter was the worst quarter for stocks since 2011. So a lot of this month�s positivity was really just rebounding from that. Central banks around the world helped things by saying that they would remain accommodative. The European central bank strongly hinted that it would buy more government bonds, China cut its interest rate�and the US Federal Reserve chose not to raise its interest rate� � all of which, in theory, are moves that help spur the economy.

Why should I care?

1. The bigger picture: The outlook for the economy remains sketchy � both in the US and globally. The slowdown in China, Brazil and other emerging markets is still playing out, and it appears that it�s at least somewhat affecting US economic growth. If the global economy slows further, it will likely be bad for stock markets (that�s true for all regions).
2. For stocks: Thank you central banks. Many people are crediting central banks� actions for helping to turn around stock markets � although it might also be true that stocks were oversold heading into October. With the US financial reporting season nearing an end, the market�s focus will likely be on the US Fed meeting in December and some important economic releases before then.